U.S. regulators seize Silverton commercial bank

By IBT Staff Reporter On 05/01/09 AT 7:08 PM

U.S. banking regulators seized Silverton Bank of Atlanta on Friday, a bank that provided services to other banks, the biggest bank failure so far this year.

The Federal Deposit Insurance Corp said it had created a bridge bank to take over Silverton, saying this would allow its client banks to maintain their relationship with the least amount of disruption.

Silverton had about $4.1 billion in assets and $3.3 billion deposits and becomes the largest failure since Downey Savings and Loans was seized in November, which had about $12.8 billion in assets.

The FDIC said the failure is expected to cost its deposit insurance fund about $1.3 billion.

Silverton did not take deposits directly from the general public nor did it make loans to consumers. It was a commercial bank that provided correspondent banking services to its client banks.

Silverton had about 1,400 client banks in 44 states, and operated six regional offices, according to the FDIC. Its services included credit card operations, clearing accounts, investments, consulting, purchasing loans and selling loan participations.

The bank was closed by its primary regulator, the Office of the Comptroller of the Currency, and the FDIC was appointed receiver.

The FDIC said it hired Independent BankersBank of Irving, Texas, to provide operational management at Silverton.